Wednesday, March 13, 2013

Dental Service Organizations in 2013–a Collage of Crap

Who owns these Dental Service Organizations (DSO’s)?

Dental One Partners, is in the news in North Carolina; lawsuits from dentists and the North Carolina Dental Board. Today let’s look at Wal-Mart’s dip into dentistry. For years have I reported that a majority of DSO’s are owned by private equity and unlicensed corporate interests in direct violations of the Dental Practice Acts. It is a façade to bypass the law! Even if a genuine dentist wanted to own and operate a DSO in a legal and ethical fashion, is it hard or hardly possible?

A recent case filed in California against a dental service organization is a classic example on how these management front organizations are formed or owned to bypass the laws:

In this particular case, Wal-Mart was obviously not allowed to own dental offices due to Stark, Dental Practice Acts, and Federal Anti-Kickback Statues. So what did Wal-Mart do to get in on the lucrative business of dentistry and maintain full control? Under the guise of compliance, they decided to setup a management (DSO) entity in Delaware and locate the home offices in Nevada while setting up dental offices in California and Arizona, with their own crew. Heck, even Smile Brands has hopping into bed with Wal-Mart.

It is alleged that Kent Reeves was the former VP of New Business Development for Wal-Mart, now an executive of the fake dental management company. It is further alleged that Ken Antos owns a restaurant chain inside of Wal-Marts and is a private equity man, now another executive of this fake management company. The lawsuit states that after the idea was presented to Wal-Mart by Dr. Kianor Shah, a California Dentist, it was business as usual.

Since neither of their two “de facto owners” are licensed dentists nor have any dental office management history at all, they needed a dentist to register all of the entities with those states in order to open the doors.

It appears as they approached a politician, whom happens to be a dentist, to serve as their front man:

http://www.nevadanewsbureau.com/2010/03/30/state-gop-chair-resigns/

Does this story sound familiar to the private equity backed cases of Forba, Dental One, Aspen, Heartland, ReachOut, KoolSmiles, and others alike?

The FTC says that it has not seen any cases where there was an issue with competition for other dentists. Well how many more private equity backed dental scandals need to be uncovered before the federal government steps in and protects the public from harm and allow fair competition to dentists? The result is usually the same when these DSO’s enjoy immunity. Dentists are coerced to push for production and patient care becomes a second priority.

If you wanted to take the time, all of these trace back to a few “not so Good Men” and the DGPA’s president Edward Meckler; also top dog at Dental One Partners.